Public Sector Planning [Focus- Infrastructure]

1. Public Sector Planning [Focus- Infrastructure] • Public Sector Planning in India has been changing its face from time to time, from non-existence to dominance and from dominance to coexistence with rapid privatization • The initial 5-year plans gave ample importance to development of infrastructure and industries in the public sector. • This continued till early 1990s and then the process of reversal began. • It is not that the expenditure in the public sector has gone down. In fact, it has been steadily increasing. But government has been divesting its holding in most of the public sector undertakings and focusing more on infrastructure development. • Focus- Railways, Electricity, Telecom, Drinking Water, Housing, Road • Rapid Framework Analysis

2. Railways • A study of plan outlay for transport sector and railways clearly indicate that the Railways’ share as a percentage of the total transport share has come down from 53% to 37%. • What should be the role of railways in the total transport scenario? • Despite the Railways being fuel efficient and environment friendly should we allow its marginalization by progressively reducing its share in the plan funds

3. In the investment policy for the next 5 to10 year period a large role has been assigned to Public Private Partnership (PPP) • Railway has become a symbol of national development. People have been requesting for new railway lines, gauge conversions, doubling of tracks and electrification, etc., and their aspirations are articulated by their elected representatives, both inside and outside the Parliament. • What should be the mechanism for funding social projects? Should they be funded directly through the General Exchequer without any dividend liability? Should there be participation of state governments and to what extent?

4. Electricity 52.3% contributed by State Sector, 34% by central sector and 13.7% by private sector, as on July 31st, 2007.

5. MAJOR PLAYERS Public Sector : NTPC, National Hydro Electric Power Corporation, Nuclear Power Corporation Domestic Private Sector : Tata Power, RPG Group – CESC, Reliance Energy International Private Sector: China Light and Power (CLP), Marubeni Corporation • STRENGTHS Abundant coal reserves (enough to last 200 yrs) Vast hydroelectric potential (150,000 MW). Emergence of strong and globally comparable central utilities (NTPC, POWERGRID,) Further Renovation, modernization and up - rating of old thermal and hydro power plants will add to the production.

6. Power Sector Reforms and Policies • 100% FDI permitted in Generation, Transmission & Distribution • Each State has its own Electricity Regulatory Commission. • The Projects focused under AG&SP (Accelerated Generation & Supply Program (AG&SP) during the 10th five year plan period were for Renovation, modernization and up - rating of old thermal and hydro power plants at concessional lending rates with interest subsidy upto 3% provided by Government of India • The National Electricity Policy aims at making electricity available for all households in next five years i.e demand to be fully met by 2012. • Under rural electrification, against a target of 10,000 villages to be electrified, 9,819 villages were connected in 2005-06. However, the next two years will be crucial for the Bharat Nirman programme, as the target for electricity coverage has been hiked to 40,000 villages per year.

7. Telecom

8. Telecom Policy • India -5th largest telecom services market in world ($ 17.8 bn by 2005) • Telecom market grown about 25% over last 5 years (Wireless segment-85% p.a. & fixed line- 10% p.a.) • Indian telecom market has both public & private sector companies (Public sector-43% market share from over 90% in 2000)

9. 74% to 100% FDI permitted for various telecom services • Zero-Customs duty on all import of component and raw • materials required for manufacturing telecom equipment. • FIPB (Foreign Investment Promotion Board) approval • is needed for FDI exceeding 49% in all telecom services. • 100% FDI permitted in telecom equipment manufacturing • Indian telecom policy aims to encourage both private & • foreign investment. • TRAI an independent regulator

10. Major Players & Presence in value chain

11. Drinking water • State subject • Assisted by Centre through schemes like ARWSP, Rajiv Gandhi National Drinking Water Mission, Bharat Nirman, etc. Opportunities: • Renew old schemes which are dying by giving them new life through proper assistance. • Revive the traditional sources/ encourage rain-water harvesting. • Providing the regional schemes from alternative safe sources by extending new pipelines. • And many more.

12. What does Bharat Nirman have in store for Water? • Intensive co-ordination among the States. • Geo-techno-economic studies of the regions. • Turnaround till-date failed/ no-functional schemes with proper administrative intervention. • Identifying and developing new low-cost technologies. • To bring in sustainability, bring in institutions like PRIs. • Regulate over-exploitation of water by building recharging structures. • Compile and circulate the best practices in the drinking water sector.

13. HOUSING • A new National Housing and Habitat Policy 1998 has been formulated which was approved and laid before the Parliament on 29.7.1998. The objectives of the policy are to facilitate construction of 20 lakh dwelling units each year with emphasis on the poor. • Scheme of Night Shelter and Sanitation Facilities for the urban footpath dwellers is being implemented as a centrally sponsored scheme in the metropolitan and other major urban centres. • A sum of Rs.1600 crore has been provided as central outlay in 1998-99 (BE) for rural housing with a target to construct 923908 houses under the Indira Awas Yojana (IAY) in the current year • Government has decided to allow FDI up to 100% under the automatic route in townships, housing, built-up infrastructure and construction-development project

14. Road • The last government initiated ambitious road projects for development of highways, rural roads and link roads. • The Pradhan Mantri Gram Sadak Yojana provides for linking up of all the inhabited [pop.-1000, 500 for tribal villages] villages. • To connect them, over 145000 km of road will be built. • In addition, approximately 2 lakh km of road will be upgraded in order to establish full farm to market connectivity. • Requires investment of more than Rs 48000 crores. • The quadrilateral project aims at linking the 4 major metropolitan cities- Delhi, Kolakata, Chennai and Mumbai. The total road length under this project is 5846 km out of which 5590 km, i.e. over 95% has already been completed. • About 65% of freight and 80% passenger traffic is carried by the roads.

15. Rapid Frame Work • Context- • key policy actors -Government, Political Parties, Private sector, Civil Services Organisations, Citizens, International Bodies, Governments of other countries • sources of resistance to evidence based policymaking -The populist policies of the political parties and the collusion of business houses with the various key actors • Evidence- • current theory -The state should divert its attention from the productive process and allow more public private partnership in the planning and implementation process • experts - The members of Planning Commission, the researchers of the Centres for economic or policy research, the academia • Link- • roles they play- researchers, intermediaries and implementers of the policy • Whose evidence and research do they communicate?- They communicate the research and evidence gathered by the government owned or sponsored research centres mainly. Some of them, who are critiques of the policy, may also source their evidences from CSOs etc. • External Environment- • main international actors -WTO, the World Bank, IMF, UNO, SAARC, OPEC, NAM, Governments of other nations, multi-national companies and CSOs. • overarching economic, political or social processes -Economic trends that are overarching are those that encourage Privatisation, political trends that support Coalitions and social processes that try to imbibe the best practices prevalent in other nations, which appeal to the structures within which our society functions

16. Thanks! Please join us in discussion. Learning Group- 9 Ipsita Das Murli Manohar Purnendu Bikash Giri Richa Rai Shyam Dayal Singh Vivek Kumar